Maximizing Your 2024 Tax Savings with Section 179: A Guide for Farmers and Ranchers

Section 179 of the IRS tax code allows you to deduct the full purchase price of qualifying equipment or software bought or financed during the tax year. This deduction is a game-changer for businesses like yours because it reduces your taxable income for the year, which directly benefits your bottom line. By taking advantage of this incentive, you can reinvest tax savings back into your business operations, boosting growth and efficiency.

2024 Deduction Limits

For 2024, the Section 179 deduction limits are as follows:

Maximum Deduction: $1,220,000. This is the total amount you can deduct for qualifying equipment purchased in 2024.
Spending Cap: $3,050,000. Purchases above this cap will reduce the deduction on a dollar-for-dollar basis.
Bonus Depreciation: 60% for 2024. After reaching the Section 179 spending cap, you can still benefit from bonus depreciation on both new and used equipment.

Don’t wait – plan your purchases now to ensure you maximize these deductions for 2024!

Advantages of Financing and Section 179

For many farmers and ranchers, financing equipment can offer unique financial benefits when paired with the Section 179 deduction. By financing your equipment purchase and then claiming the Section 179 Deduction, you can often deduct the full amount of your purchase without having to pay the entire cost upfront.

“The primary advantage of financing equipment and then claiming the Section 179 Deduction is the capability to deduct the full amount of your purchase without paying the full amount this year. In many cases, the tax savings from the deduction will result in a larger bank balance than if you never financed the equipment at all.”
– Heather Jantz, COO MJE Livestock Equipment

In other words, financing can be an effective way to maintain cash flow and potentially increase your bank balance, making it an excellent strategy to consider when planning end-of-year purchases.

Eligible Equipment

Most equipment and machinery used by farmers and ranchers qualify for Section 179, including:

Livestock Equipment: Feeders, waterers, and handling equipment
Farm Machinery: Tractors, combines, and other essential machinery
Single-Purpose Agricultural Structures: Facilities like milking parlors or grain bins
Breeding Livestock: Livestock intended for breeding purposes

To qualify, your equipment must be purchased and put into service by December 31, 2024. This is crucial to making sure you can apply this deduction for this tax year.

Why Act Now?

Imagine you purchase a piece of livestock equipment, like the Select Model Conquistador Portable Wheel Corral, with an MSRP of $38,540. If you’re in a 35% tax bracket, a Section 179 deduction could mean approximately $13,489 in tax savings, effectively reducing the cost of your equipment to just $25,051. These savings can make a significant difference, especially when applied to multiple equipment purchases before the end of the year.

Try the handy calculator available online→https://www.section179.org/section_179_calculator/

Consult with a Tax Advisor

While Section 179 provides substantial tax benefits, it’s important to consult with a tax advisor or accountant. They can ensure that your use of this deduction aligns with both federal and state regulations and fits into your farm’s broader financial strategy.

Key Takeaways and Action Steps

Act Fast: Secure your equipment purchases before December 31 to qualify for 2024 deductions.
Strategic Planning: Use Section 179 to meet your farm’s operational needs while optimizing your finances.
Professional Guidance: Talk with a tax advisor to ensure compliance and to maximize your benefits.

Contact your local MJE Livestock Equipment Dealers today to discuss eligible livestock equipment and make your end-of-year purchases. Don’t miss out on the chance to maximize your savings for 2024 – every dollar saved is a dollar you can reinvest in your business’s success!